After so many attempts and delays, the US government has finally approved a Bitcoin exchange-traded fund. The proposed ETF is still awaiting approval from more regulators, but the 21Shares CEO says it will be a game changer for the industry.
The “how to invest in bitcoin etf” is a question that plagues many investors. The world needs a place Bitcoin ETF in the US.
Despite the increasing popularity of cryptocurrency exchange-traded funds (ETFs) around the world, the global trading community continues to wonder when a spot Bitcoin (BTC) ETF would launch in the United States.
After years of rejection by the US Securities and Exchange Commission, some ETF experts believe a spot Bitcoin ETF could become a reality around mid-2023 (SEC). Despite the SEC’s apparent distaste for such a product, industry participants like Grayscale continue to lobby for a spot BTC ETF.
The possibility of the SEC approving a spot Bitcoin ETF is one of the most anticipated events in the industry for several reasons.
A spot Bitcoin ETF, according to 21Shares CEO Hany Rashwan, would allow institutional and ordinary investors now banned from the crypto market to participate.
“Investors are institutionally excluded due to investment limits and legal uncertainties,” the CEO said in an interview with Cointelegraph.
“For less tech-savvy retail investors, the biggest barriers to investing directly in crypto are building a wallet and trading on unfamiliar exchanges and platforms.” “Investing in an ETF to access cryptocurrency would alleviate these problems,” Rashwan noted.
He noted that the new asset class comes with its own risks, but that “this applies to all goods”.
According to the CEO of 21Shares, one of the main differences between owning cryptocurrencies and crypto ETFs is that investors can buy and sell the ETF through a traditional bank or broker in existing investment or trading portfolios. “To hold the tokens, you don’t need to register any additional accounts or wallets,” Rashwan said.
The total amount invested in crypto ETFs has reached $16.3 billion.
While the SEC has not yet authorized a pure Bitcoin ETF in the United States, similar investment products are gaining popularity in other countries. In February 2021, Canada launched its first-ever Bitcoin ETF, the Purpose Bitcoin ETF, becoming one of the first countries in the world to do so.
On May 12, three new spot cryptocurrency ETFs are expected to start trading in Australia, including a BTC ETF from Cosmos Asset Management and BTC and Ether (ETH) ETFs from 21Shares.
Aside from pure asset-based ETFs, there is a wide variety of ETFs linked to asset derivatives such as futures or contracts that combine shares of major crypto companies.
According to figures from ETF research firm ETFGI, total assets invested in crypto ETFs and exchange-traded products (ETPs) reached $16.28 billion by the end of the first quarter.
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“We are confident that this growth will continue as more markets open up to crypto, and Europe has been at the forefront of innovation and adoption of crypto ETFs,” noted the 21Shares CEO.
“Key points to note are that an allotment to crypto is becoming an increasingly important aspect of portfolio diversification, and they prefer to do it through ETFs for the reasons outlined above – ease of access, cost-efficiency and transparency.”
Since the inaugural crypto ETP in 2018, 21Shares has released a total of 31 crypto ETPs, including listings on major exchanges in Frankfurt, Zurich, Paris and Amsterdam. The company has also attempted to develop a spot Bitcoin ETF in the United States, filing for the ETF alongside Ark Investment Management in June 2021 with the Securities and Exchange Commission. On March 31, the SEC formally rejected the ETF application.
The “what are etfs stocks” is a question that has been asked countless times. The answer to the question is: an exchange-traded fund (ETF). An ETF is a type of investment company that tracks the performance of a particular index, commodity, or basket of assets and trades on an exchange like any other stock.
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